MWC 2014: ARM Not Convinced By Smartphone Saturation Fears

British chip designer ARM has shrugged off fears of smartphone saturation in developed markets, despite slower sales of high-end devices in the second half of 2013 affecting the company’s full year financials, telling TechWeekEurope that cheaper smartphones represent a huge opportunity.

Speaking at Mobile World Congress in Barcelona, James Bruce, director of mobile solutions at ARM, said that the recent launch of its ARM Cortex-A17 chip, which aims to deliver high end features to mid-range smartphones, was part of a planning process which takes place over four to five years – two years to design and two or three years for manufacturers to produce the chips.

“Smartphones going to a wider market is a great opportunity,” he said. ““What we’re seeing now is that smartphones are going all the way from $25 up to $600. We’re now at the point in the market where we’ve got two billion smartphones in the market actively being used, but there’s still four billion mobile subscribers using feature phones.”

Mid-range opportunity

Bruce said that the creation of the Cortex-A17 was part of ARM’s strategy of trying to offer experiences in lower prices and stressed there was no decline in developed markets, despite Samsung’s fears to the contrary. He said the attraction of the entry level market was that the majority of consumers are purchasing new devices, whereas in the US and Europe, many people are on two year contracts.

MediaTek has announced octa-core chipsets using Cortex-A17 technology, while Qualcomm has announced an improved Snapdragon 801 processor as well as two new mid-range processors, the Snapdragon 610 and 615.

“We really like it when partners announce new chips,” said Bruce unsurprisingly, adding that it was great for the consumer as they would have more choice. He was also optimistic about the prospect of a number of new mobile operating systems, including Firefox OS, at MWC, saying it was great for the company as they all used ARM architecture.

“The Firefox OS announcement was very interesting. We were really pleased with ourselves because we had a $35 smartphone to show and they come and announce a $25 smartphone,” he said.

Connected future

Two of the biggest trends at MWC were wearable technology and the Internet of Things (IoT) – two areas which Bruce was confident would be a source of prosperity for ARM, pointing to the Pebble watch on his wrist and his Fitbit, both of which use the firm’s technology.

“For the first few years of its life, the smartphone was a category destroyer. It became your MP3 player, your personal navigation device and your camera,” he said. “Now, what’s happening is your smartphone is becoming a hub to control devices around you. Wearables are part of that trend.”

However he said that without connectivity to other devices, such as smartphones, smartwatches would be no different to the Casio calculator watches of the 1980s. It is therefore his prediction that just about everything will become connected, and that ARM technology could be used in these devices, from sensors to servers.

Diverse market

This, he explained, is one of the reasons why ARM has continued to lead Intel in the mobile space. He said the mobile industry was just too diverse to be dependent on one supplier and that manufacturing partners needed to have multiple products at different price points supporting different standards.

“ARM is way ahead of Intel because last year alone we shipped two billion microcontrollers and some of those are going into IoT products,” he added, saying that ARM would sometimes create a chip for mobile devices, only to see them being used in ways it hadn’t even thought of during the design process.

“ARM technology is being used in servers, base stations and wearables – there’s lots of opportunities to drive growth for ARM. That’s the nice thing, it’s not just one company with one thinking. It’s different companies trying different ideas.”

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